The euro held steady against the dollar during the Asian session, continuing into the London open, clinging to much of the gains it made the previous day after weak U.S. data underscored expectations that the Federal Reserve will keep interest rates near zero for a while.
The dollar struggled to regain ground after taking a bath yesterday from data showing a slowdown in manufacturing growth in the U.S. coupled with an unexpected fall in existing home sales in April. The housing market is expected to remain stagnant well into the long term as building costs remain lower than resale prices.
Lingering concerns about the possibility of debt restructuring in Greece, however, were expected to temper any gains in the euro against the dollar.
This might be a temporary rebound; most analysts wouldn't be a surprise if the euro were to head down towards below $1.40 support in the short term.
The euro has dropped around 4 percent since hitting a peak near $1.4940 in early May, as a rout in commodities such as silver unnerved investors, prompting the unwinding of dollar-funded bets in risky assets.
Signs of an easing in risk reduction among investors, with commodities having regained some stability this week after their sharp sell-off earlier in May, have also supported the euro and commodities-related currencies such as the Australian dollar. The US Dollar is likely to suffer as a result due to it’s role as a hedge against such commodity risks.
The commodity stabilisation could encourage risk taking in foreign exchange. But this is still somewhat lacklustre like we are waiting for some green light to take risk.

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